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Finance is key to the massive economic transformation required to move away from fossil fuels and reach net zero so the global economy can be run without damaging the climate.
In the UAE, green financing is becoming a major priority for banks, as evidenced by their growing commitments to green projects and the issuance of green-oriented funds. With the bank’s assistance, communities looking to bolster their nascent renewable energy industries will have increased access to funding that could bring them closer to meeting their climate goals.
In 2022, six central UAE banks committed to providing over $51.8 billion in green financing to support renewable energy, waste-to-energy, and green technology projects.
The six banks are First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Emirates NBD, Dubai Islamic Bank, Mashreq Bank, and Abu Dhabi Islamic Bank.
The UAE is one of the world’s first countries to include sustainability reports among the mandatory disclosures of public companies listed on the stock exchange.
The UAE Banks Federation (UBF) identified these banks as being at the forefront of the fight against climate change. UAE banks have issued $16.9 billion in green bonds and sukuk to finance sustainable projects. The UBF has also set up an ESG steering committee to promote green finance per the Central Bank’s policy.
According to Jamal Saleh, Director General of UBF, there are three major areas through which its members will drive the transformation of the financial sector: propelling green projects by providing funds and issuing green bonds; inculcating green practices among customers, SMEs, suppliers, and vendors through eco-friendly operations and living; and by measuring and efficiently managing every UBF member’s carbon footprint and reporting reductions achieved.
The UAE’s efforts to promote green finance and sustainable development align with the Year of Sustainability goals and help to strengthen the country’s position as host of COP28.
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